Blockchain technology has gained a lot of popularity in recent times, especially for use in cryptocurrencies such as bitcoins. However, the potential of blockchain technology is not restricted to the use of digital currencies. Blockchain technology can be used to implement different technologies that were unable in the past. Blockchain is also known as distributed ledger and it is strong enough to revolutionize the economic sector with its scalable, secure, and transparent features.
Similar to the internet, blockchain technology offers an international infrastructure of safe networks that allows users to initiate transactions without any intermediaries. This will reduce the transaction costs and enables the information in the digital ledger to be shared within the nodes in the network. These distributed ledgers are not managed or controlled by any central authority and the information can be viewed by all the users of the network. When a new transaction is initiated in the ledger, the data will be authenticated and encrypted with cryptographic algorithms by the network’s other nodes. A new block is only allowed to be added if the majority of nodes authenticate the transaction. Thus every transaction remains auditable and secure without any third parties. Blockchains can be private or public.
Blockchain technology gives the opportunity for a transparent and secure transaction mode without any intermediaries. The financial sector is already set to make use of this digital ecosystem and is one of the early adopters of blockchain technology. Deloitte is developing ‘Smart Identity’, which is a solution that will help various organizations as well as banks to simplify the KYC process. Blockchain technology is also influencing the insurance sector, financial institutions, money exchanges, etc. Several organizations are also making use of blockchain to record timestamps.
Two startups, Everledger and Factom are using blockchain technology commercially. Factom is focused on some of the commercial projects that secure data while Everledger targets the identity of nodes in the blockchain transactions. The history of the blockchain nodes cannot be modified, which increases trust. The company utilizes the history of transactions to validate the records of law enforcement agencies and insurance companies.
Applications in the developing countries
With the increase in the popularity of digital identity that is backed up by blockchain, an opportunity has arisen that allows the recording of the data of numerous people for different processes and industries. If a private key is used to secure digital identity, it will help financial institutions and banks to know more about their customers. If blockchain technology is used to store information, the transactional cost can be marginally reduced. Thus if blockchain technology is properly implemented, it will surely revolutionize the different industries of the whole world.
There are several developers who work behind the development of more advanced technologies to implement blockchain technologies in different industries effectively. The potential of this technology is familiar to almost all industries. Experts say that blockchain technology can be seen as revolutionizing the whole world in the near future.